Why Doesn’t Paying Your Rent Improve Your Credit Score?

This week, Maggie is chatting with Lily Liu, CEO of Piñata, the largest rental reward and credit building program for renters. In this episode, we talk about how to negotiate rent with your landlord, how to use rent payments to build up your credit score, and more.

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Lily Liu’s career started out by straddling the lines of technology and government founding PublicStuff, which she sold to Accela which was then acquired by Berkshire Partners. As the CEO of Piñata, Lily has brought to life her vision of creating financial equality for renters. In 2017, she was recognized as Forbes’ 30 under 30 Top Entrepreneurs and Business Insiders’ People to Watch. Her entrepreneurial leadership allows Lily to address glaring systemic issues in the financial and real estate industries. Learn more at www.lily-liu.com.

To learn more about Maggie and her coaching and speaking services, visit www.maggiegermano.com.

The theme music is called Escaping Light by Aaron Sprinkle. The podcast artwork design is by Maggie’s dear husband, Dan Rader.


Maggie Germano 0:05
Hi, and thanks for listening to the money circle podcast. I’m your host, Maggie Germano, and I’m a feminist and a financial writer, speaker, educator and coach for women. I’m passionate about making personal finance less scary and more approachable so that women can improve their relationship with money and take control of their finances. Every other week, I will interview an amazing, inspiring woman to talk about the issues that impact our money, our health, our independence, and more. We will touch on the societal and structural issues that we need to work together to change and the actions that we each have the power to take in our own lives. If you’d like to learn more about me and the work that I do, visit my website at Maggie germano.com or follow me on Instagram at Maggie Germano. Thanks again for listening and I hope you enjoy.

Maggie Germano 0:55
Hey there and thanks for listening. I’m your host Maggie Germano. And this week, I’m chatting with Lily Liu, CEO of Pinata, the largest rental reward and credit building program for renters. In this episode, we talk about what Pinata does to help renters build up their credit history, what renters can do to protect themselves as the COVID era protections, and how to negotiate price with your landlord. If you’re a renter, and you want to make the most of it and make sure that your rental experience is reflected on your credit report. This episode is for you. Enjoy.

Maggie Germano 1:42
Okay, welcome, Lily, thanks so much for being here today.

Lily Liu 1:46
Thanks so much for having me, Maggie

Maggie Germano 1:47
of course. So why don’t we start off by having you tell us a little bit about who you are and what you do?

Lily Liu 1:55
Absolutely. So, you know, I’m a tech entrepreneur actually started my career in a very different space. I started in government and politics did that for about half a decade. No work for state local government, I was with a management rotational program in the mayor’s office in Long Beach than with Mayor Bloomberg office. And when I left government, I started my first tech company, it was really focused on how we can allow for residents to better communicate with their local government for city services. So what we now know of as 311, non emergency 911 started one of the first web to mobile, web and mobile solutions that could automate that level of communication between residents, businesses and governments. And so we scaled it to hundreds of cities. And eventually, the last year of operations. We also were used by some large commercial real estate buildings, including Burj Khalifa, we were acquired by a great company called Accela. And then I went on to, you know, advice from early stage tech companies. One was a great ed tech company. And now I’m on to pin Yatta, you know, with Jada, I have to say, I’m the most excited for the scale and reach of the company, we focus on giving more back to renters, for their on time rent payments, you know, I’ve been a renter on and off my entire adult life. So majoring myself, but two decades now. And so it’s been a big passion project for me.

Maggie Germano 3:28
That’s great. And that’s so interesting how you went from government work to the tech world? And how did you kind of you mentioned that you left government and went into tech, how did that kind of happen for you? Like, how did that transition work?

Lily Liu 3:44
You know, it was it was actually much more natural than it sounds, my first stint in local government. And I actually was in a great management rotational program at the city of Long Beach. And one of the departments that I rotated through was the technology department. So a big part of my focus there was looking at how we can use technology to make government more efficient. And I took my learnings there into Mayor Bloomberg office. And and you know, this was when mobile apps were just becoming a thing and in the private sector. So certainly in government, it was very new. It was exciting for folks to think through how that technology would impact operations. And so it felt like a very natural transition, because tech, at that point was a big part of my focus in every role that I sat in with local government. Certainly the the tech startup world was very different operationally. So that’s a whole nother that’s a whole nother facet of, of operations and I had to learn a lot. I think during that that part of the transition, you know, less bureaucracy, very fast moving and there weren’t a lot of women in that in that field when I first started.

Maggie Germano 5:04
Yeah, no, I totally I can imagine that. And so that’s really interesting. Thanks for sharing that story. And so tell us a little bit more about Pinata, like what it is and what it actually does.

Lily Liu 5:17
Yeah, Pinata. We are a mobile application for renters that what we’re doing is we’re collecting rent payment data. So renters tell us when they pay the rent and fill in on time. And we can also plug into their bank account to confirm that rent payment transaction. Once we do that, we actually give renters digital points called periodic cash that they can use on a series of different rewards and perks. This ranges from everything, including everyday savings, and major brands that we know our renters love, like Amazon, target, Walmart, but then they can also get great deals on merchandise products, services that they’re already using, in addition to new and emerging brands. Now that’s, that’s the everyday savings part and the rewards part of what we do, we also will take that rent payment data and report it to all three major credit bureaus to help boost credit scores for renters, we work with Experian, Equifax, and TransUnion. And that’s a big part of that was a big part of our focus last year and pushing through on these partnerships with the credit bureaus, namely, because we feel like it’s such a, it’s table stakes, it’s something that all renters should be able to deal with every time rent payment is built up their credit score.

Maggie Germano 6:42
Yeah, it’s kind of crazy thinking about how people can rent for their whole lives and never miss a payment never have a late payment. And somehow that doesn’t show up as showing them as you know, credit worthy and trustworthy in that way.

Lily Liu 6:58
Yeah, that’s right. And that’s a big part of my own story as a renter to homeowner and back to the renter, because I remember the first time I applied for a home loan for an apartment was in my 20s. And, you know, I had only one credit card, not a lot of, you know, did not spend a lot on it. And unfortunately, my 12 years of renting was not reflected in that in that credit score. And I remember seeing if I could pull old rent payment transactions to show ate my biggest bill every month, I paid in full and on time without fail. And you know, unfortunately, I remember the banker said I can’t look at any of this data, because it looks great, you know, you have a very reasonable, reliable individual to provide a loan to but I can’t look at any of this data, unfortunately. And that that was a huge shock. I remember when I first tried to get that home loan.

Maggie Germano 7:55
Yeah, I can imagine that and, and something that reminds me of is a lot of apartments, apartment buildings and managers, they will pull people’s credit in order to approve them for a you know, to rent an apartment, but somehow you’re renting experience traditionally does not be get reflected there, even though your credit then matters in order to rent.

Lily Liu 8:18
It’s such a it’s such a reversal of logic, you know, to rent a place, they don’t look at your past rental payments, it’s pretty incredible. And rent payments are very ephemeral. It’s very much in the moment, if you don’t pull the rent payment, the month of chances are, you know, are you going to be successful pulling rent payments from five years ago, it’s going to be hard, mostly because these property management companies or individual landlords, are they keeping the data that keeping records of that that’s an unknown, right? And so you’re really putting at risk your ability to get that data into the hands of another individual or group. And then for us, again, our value prop and our pitch to renters is we’re going to keep that information for you when you need it, we’re going to report it to the bureaus and and really help you get that credit score boost.

Maggie Germano 9:11
That’s great. I love that what a good idea. And so who might be like the perfect fit for an app like pinata?

Lily Liu 9:20
you know, we really want to target families, individuals that are renters, obviously, but renters where you miss that rent payment every month when that rent payment leaves your bank account. It’s a you know, it’s a stressful time of the month and we want to make sure that we can help bring some amount of joy during your rent day or when rent payment window and so making sure that you can get more back again from the brands that participate on our platforms, everything from gift cards to savings, and then also that credit score boost so you know again, some thing is being reflected on your credit report to show that payment. And so that’s the target profile of our renters. You know, renting the age of renters is actually quite broad, right? You have a lot of renters early in their career. But what you also see in the renting lifecycle is that people, you know, once the kid kids are older, they start to rent again. So we’re actually seeing in our user base, we have quite a large number of users that are 45, and end up. And so that was actually contrary to what we originally thought, and who we’re targeting from a user base perspective.

Maggie Germano 10:38
Yeah, that’s really interesting. And I love what you were saying earlier about, you know, bringing some joy to the rent payment piece, because I know that like, as a financial coach of big part of what a lot of my clients get stressed about is like making sure they can pay their rent at the beginning of the month. And so adding this, like, more, you know, instant gratification of a gift card or other rewards is a really exciting bonus, I think on top of that long term reward of having their payments reflected on their credit report.

Lily Liu 11:13
Yeah, yeah, that’s right. It’s, you know, we talked about it a lot in the companies bringing some level of joy because it is a stressful time of the month for most people, right, making sure they can hit the rent day window and hopefully not go beyond the grace period. And, and, and we’re always thinking about how what more can we do for renters, and even when we’re thinking about our roadmap, every part of it, you know, we have a series of questions, we asked ourselves, sitting in the shoes of being a renter, you know, what I would I use this? Would I appreciate this level of rewards or savings? Does this brand resonate with who we think are what we think our renters needs? So that’s a big part of what we think about every day at Pinata.

Maggie Germano 11:59
Yeah, I love that. That’s great.

Maggie Germano 12:00
And is there anything that someone should be cautious of if they’re, if they’re renting, and they’re thinking about using Pinata, is there anything kind of top of mind that you would want them to be cautious about?

Lily Liu 12:15
cautious about in using Pinata. You know, I want to just clarify to users that it’s not going to, you know, we’re not pitching a dream of helping you save for a down payment for a home or, you know, for us, it’s about everyday real world expenses, we’re going to help put a little bit more back in your pocket every month, we’re going to help you save, but certainly it’s not about, you know, big payout at the end of the year. So, you know, just clarification on, on how much you can get from the platform is something that we’re continuing to work on and improve in the company and make sure that we we create additional pads of both saving and smart financial opportunities and partnerships in the app. So that’s something but there’s nothing, you know, outside of the deals and the credit reporting, you know, there’s nothing necessarily to be cautious of for our renters. No.

Maggie Germano 13:15
Yeah, no, that makes sense. And so like, yeah, just being realistic about what Piniella is kind of promising in terms of those rewards and deals and not not promising that goal. That big goal of homeownership. Yeah, that’s right. Yeah. No, that makes sense. I think that’s good to keep that up front. So something that I think is, you know, probably top of mind, for a lot of renters out there, especially folks in big expensive cities, is that, you know, even though we’re still in the midst of the COVID pandemic, a lot of those COVID era rent deals and protections are kind of being removed or phased out. And do you have any thoughts on what renters can do to kind of protect themselves now that those are fading away?

Lily Liu 14:08
Yeah, and, you know, it’s, it’s a difficult time, I think for, for consumers generally, definitely for renters with a lot of, as you mentioned, the COVID Rent protections, expiring and some have already expired last year. And, you know, our advice for renters is to of course, it’s always a relationship. And even if you are renting from a property management company, you know, at the end of the day, there’s a property manager there’s a you know, there’s a staff that these are individuals that you can have a conversation about, you know, thinking through if you need a payment plan to phase into a new rent amount and really working through coming up with with a deal that makes sense for both the group the property management company and landlord and you as a renter, you know, ultimately, it’s in their best interest, the property management companies and landlords to make sure that renters can actually pay their rent in full and on time. And so whether that entails coming up with a payment plan, maybe it’s about delaying an increase in rent. It’s really, you know, for them, it’s very costly to have turnover, right, they need to make improvements to the unit, they would have to relist pay brokerage fees, you know, go through tenant screening again. So it’s costly for groups, and if they can actually keep renters in place, you know, it’s in their best interest to work out a deal. So we always recommend just have a conversation first, you know, try not to not respond or, you know, not not pay your rent, because you’re upset about the increase, but really just try to work out, it’d be savvy about it, try to work out a deal with the groups.

Maggie Germano 15:58
Yeah, that makes sense. So yeah, having those conversations seeing if there’s room for negotiation, because like you said, they don’t really want just like tons of tenants moving out at the same time, because the prices went up, because they’re gonna lose money and not make money with that kind of price increase. So yeah, talking about that, I think is better.

Lily Liu 16:18
Yeah, it’s amazing, right? I think we are, we as consumers, I know myself, there’s a discomfort in creating any level of friction or, you know, making yourself or others feel uncomfortable. And so we almost tend to, to not try to say things in the moment or, you know, bring certain concerns up. But I think it’s, everything’s a deal at the end of the day. And, and, and so, again, these groups, I’ve seen so many different deals happen on on rent amounts, you know, rent payment plans, and you’d be just amazed how flexible some of these groups can be, especially when they’re motivated to keep you as a renter, and to make sure that they work with you to keep you in your home.

Maggie Germano 17:07
Yeah, no, that’s great. And so for folks who maybe have tried that step, and the conversations or negotiation is not working out, and they’re still worried about being able to make those payments. Are there any rules or laws that you know, of that renters can lean on?

Lily Liu 17:27
You know, unfortunately, it’s it varies state by state, and there isn’t anything that I’m aware of federally that will protect, that is a definite protection for renters. You know, it really just depends on where you live, obviously, your city for examples, pretty has a lot of protective measures for renters. And so I check, you know, of course, your local jurisdiction and any rent increase rules, you know, oftentimes there’s a cap on how much rent can be increased by, and it’s going to vary city by city, but making sure that your group is in compliance with that. And then also, for example, LA, the city of Los Angeles has a lot of rent control, controlled regions. And in you may be in a very, you know, high rent amount luxury apartment building, and it could still be in a rent controlled jurisdiction. So you know, making sure that you take a look at those details. And then there are a lot of groups that will help you take a look at some of your protections as a renter, right? So what other types of legal protections Do you have? How much time and notice does a group need to give you again, it’s going to vary, but making sure that you do your research that you understand what your rights are as a renter. And luckily, most, most cities have some great nonprofits that can actually help and already have resources in place for your local region.

Maggie Germano 19:05
That’s great. So yeah, it sounds like a lot of it is going to be being informed and knowledgeable about your own rights or where to turn and who to turn to, if you are in a not great situation. Yeah, that’s right. Great. And so is there anything else that you haven’t mentioned yet that you want to make sure that listeners take away today?

Lily Liu 19:28
You know, we also we talked a lot about renters. We also do work with property management companies and landlords. And a big part of what we’re doing is helping them to continue having a great relationship with their renters. We allow them to customize the different incentives that they have in Pinata’s app. So, for example, they can customize or they can add in a custom incentive that allows for renters to get additional benefits when they renew their lease with that property. management company. And an example would be, you know, get 1000 Extra periodic cash, which equates to, you know, hundreds of US dollars in the application that renters can actually use on different deals, rewards, gift cards, cash out opportunities. And again, it gives yet another reason to build a positive relationship with your renters and give them a reason to renew and to stay instead of shop around and look for other apartment units. Groups add in things like maintaining the unit, maintaining the home, other incentives for referring people to other units, and incentives for leaving feedback, completing surveys, there’s a whole slew of different what we call good renter behaviors and relationship building behaviors that these groups can add into the application. So that’s a big part of what we’ve been focused on is helping groups think through what types of customer incentives work for the renters and really had a participate in being a player that gives more back to their renters. So that’s been a really fun part of what we do is working with these groups to really design customer incentives that work for them. And we think of it really is a win win win, you know, renters should be benefiting property management companies and landlords can also benefit by participating on the platform. And the third part of that win is actually the businesses and the brands that are on our platform. So we have everything from lifestyle brands to health and wellness, fitness brands are very popular. We even have education brands on there. So you can get digital subscriptions to education tools. And then we have great products and merchandise for not just things that people are buying every day, but also new and emerging brands. So you can discover some some new fun things. And you know, one that I love is actually puts your kid’s name in a book every month and ships you out that book and your kid is the star of that adventure that month. So that’s been a very popular one, but we switch it out every single week. So there’s always going to be new drops of different things for our renters.

Maggie Germano 22:08
That’s great. And I love that you’re working with the, you know, landlords and property managers as well, because that shows that it’s not just on renters to be making their renting experience better and rewarding. But that, you know, the the Property Groups can be doing the same, like you said, to make things better for their tenants as well. Yeah, that’s great. That’s great. So is there anything that you have going on with Pinata right now that you want to make sure to promote to listeners?

Lily Liu 22:44
Um, you know, I think we covered a lot, but really a big part of, you know, what we’re doing moving forward for renters is, well, let’s back up here, we raised our Series A very exciting, and a big part of what we’re doing with that investment is actually we’re making a big investment in what renters can get on the platform. So in addition to having our existing brands and deals and gift cards, those are persistent, always in the app, we’re actually doing these weekly drops that I alluded to earlier. But you know, a big part of that is finding things that renter services that we know our renters need for their everyday living experiences. And we’re going to release those on a weekly basis. We also have a focus on brands that that have, you know, real environmental and social focus. So bipoc women owned businesses, we’re looking at, you know, we support companies that really have that environmental focus and an aspiration for example, as a as a company that is a debit card option for renters are for consumers that really care about, you know, the brands that align with their environmental mission and being green and, and really supporting kind of the right initiatives. So we have a big focus on making sure that the brands on the platform really aligned with our own social values as well.

Maggie Germano 24:17
I love that so much. That’s so good to hear. And that’s an even an added bonus for folks who value that as well.

Lily Liu 24:24
Yeah, yeah, that’s right. And it’s, you know, I think there’s so many products and brands and services out there. So for us, it’s really about the curation so when renters come to Pinata, they know, Hey, these are brands that that we can actually get behind because Pinata, you know, vetted these brands and really thought through who they want to promote and partner with as well.

Maggie Germano 24:48
That’s great. And so how can folks learn more about you and Pinata?

Lily Liu 24:54
So they can check out the website, pinata.ai. Whether you’re a renter, whether you’re a property management comm In your landlord, there’s a bunch of resources on there for you to learn more. Anyone can download pinata’s app, just search for pinata rent in the App Store. The app is free signing up, your account is free, you can start earning your piano cash and getting your rewards as a renter immediately.

Maggie Germano 25:18
Wonderful, and I’ll be sure to link to that in the show notes. So folks have easy access. And I wanted to thank you again for taking the time to chat today. It’s really interesting what you’re doing. I’m excited to share it with the listeners.

Lily Liu 25:33
Thanks so much, Maggie. I’m a big fan. Thanks for having me on the show,

Maggie Germano 25:36
of course.

Maggie Germano 25:42
As I wrap up this episode, I wanted to record a quick podcast update to let you know that I’m going to be taking a break from recording these episodes. While I’ve enjoyed every moment of creating these conversations for you, showing how money impacts us personally and societally. It’s time for me to create a little more space in this season of my business and life. So I’ve decided to make the hard decision to take a break from this show. That said there are still ways to connect with me and learn how to gain control and confidence over your money. For one, you can still go back and listen to any money circle episodes that you might have missed. You can also jump on my weekly newsletter where I let you know what I’m up to and just give quick money tips to you. You can also connect with me on Instagram @MaggieGermano or just go to my website if you want more information on coaching services. Thanks again for being here. I hope this podcast and these conversations have been as impactful and insightful as they have been to me. I also hope that you’ll stay in touch with me while the podcast is on pause. Thanks so much. Bye bye.